City of Lausanne

This report does not constitute a rating action. Overview Credit context and assumptions Base-case expectations The City of Lausanne?s creditworthiness benefits from a supportive institutional framework, like other municipalities in the Canton of Vaud. Robust growth in fiscal revenue will offset rising operating expenditure and result in sound operating balances. Lausanne? s economy remains very wealthy by international standards and is characterized by robust socioeconomic indicators, supporting the city?s fiscal base. Limited deficits after capital accounts, despite elevated investment, will result in moderate debt intake over 2024-2026. We view as positive the city?s conservative financial management in budgetary planning and its tight monitoring of operating expense. Lausanne's liquidity position should remain solid on strong access to the Swiss capital market

...Lausanne's wealthy economy will continue to support the city's creditworthiness through elevated tax revenue. Lausanne benefits from a very wealthy economy by international standards and a robust labor market. We expect its economy will continue to remain resilient amid external downward pressure, evolving in line with that of Switzerland. We forecast the Swiss economy will expand 1% this year, with growth stabilizing at 1.4% in 2025-2026. This should strengthen already-high household income and consolidate the city's tax base. The recent agreement between the canton and municipal sector on equalization reforms should have a net positive effect on Lausanne's finances. The equalization reform should allow...

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